Understanding Punitive Damages in Employment Discrimination Cases

If you were harassed or discriminated against in the workplace, you may wonder about your compensation options. While a court can award compensatory damages to cover losses such as medical bills or lost wages, it may also award punitive damages. They are financial penalties intended to deter malicious and egregious behavior, such as discrimination.

Rules regarding punitive damages in employment law cases can be complex to navigate. Knowing your options and working with an employment discrimination lawyer can help you seek punitive damages in your claim.

What is Considered Punitive Damages for Employment Discrimination Cases?

In California law, punitive damages are referred to as exemplary damages. They differ from compensatory damages, which are awarded to cover actual losses, such as medical expenses, lost wages, emotional distress, or reputational damage.

While an employment discrimination case can award compensatory and exemplary damages to an employee, they serve different purposes. Per Section 3294 of the California Civil Code, exemplary damages punish behavior considered more egregious than negligence, such as malice, oppression, or fraud.

This type of damage primarily serves as a deterrent against similar wrongful acts in the future, holding defendants accountable for the harm caused to the employee.

Are Punitive Damages Available in Cases of Employment Discrimination?

Punitive damages are one of the possible types of compensation you can receive in an employment discrimination claim. However, California laws such as FEHA set high standards of proof to determine whether punitive damage should be awarded.

For the court to consider punitive damages, you must submit evidence that shows:

• Clear and convincing evidence of egregious behavior. According to the California Civil Code, Section 3294, there must be sufficient evidence the employer acted maliciously, fraudulently, or in an oppressive manner.
  Egregious behavior includes sexual or race-based harassment, retaliation for reporting unsafe or inappropriate behavior, and wage theft.
• Employer’s direct or indirect responsibility. Section 3294(b) of the California Civil Code lays out the conditions for employer vicarious liability. Under this statute, your evidence must show that the employer took direct part in the discriminatory actions, endorsed or implicitly supported them, or displayed a blatant disregard for your wellbeing.

Examples of Employer Violations That Could Result in Punitive Damages

Punitive damages are reserved for the most severe infractions by employers, signaling extreme negligence or deliberate wrongdoing. Here are the types of employer actions that might result in punitive damages:

• Persistent sexual harassment. This refers to ongoing unwanted sexual behavior, especially when management is informed but chooses not to intervene.
• Severe retaliation. Taking punitive actions against employees for activities like reporting discrimination or whistleblowing. Examples include demotions, excessive disciplinary action, and wrongful termination.
• Blatant discrimination. Actions such as openly demeaning or favoring a particular group based on protected characteristics.
• Ignoring reported issues. This is when employers overlook serious complaints, especially those that endanger employees.
• Discriminatory policies. Implementing and maintaining overtly discriminatory policies.
• Wage theft. Employers knowingly and systematically underpay their staff.
• Unsafe work conditions. Deliberately exposing employees to harmful substances or hazardous conditions without proper precautions.

How are Punitive Damages in Employment Discrimination Cases Awarded?

In California employment discrimination cases, awarding punitive damages involves filing a claim asking for exemplary damages and allowing the court to decide. Here’s an overview of how it works:

• Initial claim. When filing a lawsuit, your attorney includes a request for punitive damages alongside other forms of compensation, like economic and non-economic awards. This signals the intention to seek these damages based on the alleged egregious behavior of the employer.
• Evidence presentation. For the court to award punitive damages, you must provide clear and compelling evidence that the employer acted out of malice, oppression, or fraud. This threshold is stricter than the regular evidence standard, which only requires demonstrating that an event probably occurred.
• Judge or jury’s role. The judge or the jury determines the appropriateness of punitive damages. They’ll weigh the evidence, considering the reprehensibility of the defendant’s actions, any prior misconduct, the potential harm that could’ve arisen from the discrimination, and the actual harm inflicted.
• Determination of amount. The amount of punitive damages should relate to the severity of the offense. There’s no preset cap in California, but the U.S. Supreme Court has suggested that the reward should be no greater than 9:1 of punitive to compensatory damages.
• Employer’s financial condition. The judge or jury might also evaluate the employer’s financial situation. Punitive damages are meant to punish and deter, so the amount should be significant enough to send a message but not bankrupt the company.

​​Can Employment Cases Have Restrictions on Punitive Damages?

In addition to the high standards of proof, state and federal law impose additional limitations on the punitive damages awarded in an employee discrimination case.

• Cannot claim a specific amount. Unlike compensatory damages, while a plaintiff may seek punitive damages, Section 3295(e) of the California Civil Code prohibits requesting specific amounts. The decision to award punitive damages is the judge or jury’s decision, so there is no formula for calculating these damages.
• Can’t seek punitive damages against a public entity. You generally cannot seek punitive damages from a public entity employer, such as a government agency. The California Government Code Section 825 and the Federal Tort Claims Act (28 USC 2674) provide immunity from punitive damages to these entities.
• Federal amount limitations: While California law does not impose specific caps on punitive damage amounts, past U.S. Supreme Court decisions impose constitutional limits.
  • Following SCOTUS cases such as TXO Production v. Alliance Resources (1993), BMW of North America v. Gore (1996), and State Farm v. Campbell (2003), courts may not award punitive damages considered excessive.
    The guidelines issued to calculate the constitutionality of a punitive damage award amount are based on three rules:
    • The defendant’s degree of reprehensibility
    • The disparity between the harm or potential harm to the plaintiff and the punitive damages awarded
    • The differences between the damages awarded and the civil penalties in comparable cases
  • In State Farm v. Campbell, the Court suggested using a ratio between punitive and compensatory damages to establish a reasonableness guideline. Although it is not a hard rule, ratios exceeding 9:1 may be constitutionally unfair.For example, if a harassment case awards $50,000 in compensatory damages, punitive damages should not exceed $450,000 to be considered reasonable and proportionate.

How an Employee Discrimination Attorney Can Help

If you are the victim of discrimination in the workplace, it’s advisable to consult an employee discrimination attorney as soon as possible. They can provide legal support in multiple ways:

• Case assessment. Experienced employee discrimination attorneys can review your case, determine whether it meets the state’s punitive damage standards, and offer appropriate legal options.
• Evidence gathering. An attorney has the knowledge and resources to help you if you need help gathering more evidence to strengthen your discrimination case. They can help you collect evidence like witness statements, text messages, or emails showing discriminatory intent or personnel records showing discriminatory patterns in disciplinary actions, promotions, and demotions.
• Building a legal strategy. Your employee discrimination attorney will create a legal strategy based on your evidence and case specifics. They’ll help you make your case more compelling to increase the chances of receiving punitive damages.
• Client advocacy: A discrimination attorney can represent you, speak for you during negotiations, and protect your rights and interests.
• Legal representation in court: If a settlement can’t be reached, your discrimination attorney will represent you in court and argue for punitive damages during the trial.
• Protections from retaliation: Employee discrimination attorneys understand the unique risks and challenges you might face. They can protect you from retaliatory action through confidentiality clauses, conserving evidence, and advising you on your rights. If needed, they can help you pursue additional legal remedies, such as filing additional lawsuits for violating California’s anti-retaliation laws.

Seek All Available Compensation After Suffering Workplace Discrimination

If you’ve faced workplace discrimination in California, engaging an employment discrimination attorney as soon as possible is crucial. They will advocate on your behalf, ensuring your rights are protected and you receive fair compensation.
They will assess if your situation qualifies for punitive damages while providing essential legal counsel and shielding you from potential backlash from your employer. Should your case proceed to trial, your employment discrimination attorney will represent you, present the evidence, and seek compensatory and punitive damages on your behalf.